By Nikolai Ordoña

House Speaker Martin Romualdez led the filing of House Bill 6398 which aims to establish a sovereign wealth fund (SWF), which is also dubbed as the Maharlika Wealth Fund (MWF).

It is patterned after the SWF of 49 other countries, including China, Hong Kong, South Korea, Malaysia, Taiwan, Vietnam, and East Timor, among others.

The bill is primarily authored by Speaker Romualdez along with other lawmakers, including his wife, Rep. Yedda Marie Romualdez, Rep. Jude Acidre (Tingog Party-list), Rep. Stella Luz Quimbo (Marikina City), House Majority Leader Manuel Jose Dalipe, and Senior Deputy Majority Leader Ferdinand Alexander “Sandro” Marcos, son of President Bongbong Marcos, Jr.

According to the bill’s explanatory note, “Sovereign Wealth Funds are state-owned investment funds typically financed by a country’s surplus revenues or reserves. Governments invest these funds in real and financial assets to stabilize national budgets, create savings for their citizens, or promote economic development.”

The explanatory portion also cited Indonesia and Singapore as “some of the countries that became successful” in bringing in growth in the country through SWF which serves as a financial means to manage reserves in infrastructure, transportation, healthcare, finance, technology, and other industries.

The funds for the MWF will be primarily sourced from the contributions from four government financial institutions: Government Service Insurance System (GSIS), Social Security System (SSS), Land Bank of the Philippines, and Development Bank of the Philippines (DBP). 

The House bill proposed an initial investment of PHP 250 billion to the GFIs:

• GSIS = PHP 125 billion
• SSS = PHP 50 billion
• Land Bank = PHP 50 billion
• DBP = PHP 25 billion

This will be used for investments to promote fiscal stability and economic development, helping reach the government’s priority plans.

The MWF will be managed by the Maharlika Investments Corporation, led by a 9-member board of directors composed of the Finance Secretary, nominees of GFIs involved, and 2 independent directors.

To ensure transparency and accountability, the MWF will adhere to the 24 Generally Accepted Principles and Practices (GAPP), agreed to in October 2008 in Santiago, Chile. 

Also known as the Santiago Principles, it states that SWF shall comply with the regulatory and disclosure requirements of the country where it is to be invested; and it should have a transparent and sound governance structure for operations, risk management, accountability, and other commitments. 

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